Indian equity markets may have entered correction territory after a sharp selloff, but the broader global bull run remains intact, according to Gautam Shah, founder of Goldilocks Global Research.
The remarks come as the Sensex and Nifty 50 slid more than 10% from their record highs on Monday, pushing both benchmark indices into correction territory amid global volatility and rising geopolitical tensions.
Despite the sharp decline, Shah said the structural uptrend in global equities remains intact and the current weakness should be seen as part of a broader corrective phase rather than the start of a prolonged bear market. “Global equity markets continue to be in a bull run notwithstanding the crisis,” Shah said in an interview with NDTV Profit. “The larger trend remains constructive even though markets are facing short-term turbulence.”
Market Reaction
Shah said the groundwork for the current selloff had been building for months as Indian equities began lagging their global peers.
“The foundation of today's market reaction was laid almost six months ago,” he said, adding that the current correction reflects relative underperformance rather than a breakdown in the broader market cycle.
A recent rebound in the US dollar index has also contributed to pressure on emerging markets. Shah said the dollar has strengthened over the past 10 days, which often leads to capital flows shifting away from emerging market equities.
Technical factors are also playing a larger role in current market movements, he said, as investors adjust positions following months of strong gains.
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Near-Term Outlook
Shah expects volatility to persist in the near term and said markets may test earlier support levels.
“The market may decline towards the lows seen in March–April 2025,” he said, adding that there are no clear signs yet that the correction has reached a bottom.
Despite the recent slide, Shah cautioned investors against panic selling or cutting positions during periods of volatility.
“This is not a time to cut positions and panic,” he said, arguing that corrections often create opportunities for investors who maintain a long-term perspective.
Investment Ideas
Shah said metals, public sector companies and healthcare remain among his preferred sectors in the current market environment.
He also sees opportunities emerging in smaller companies as valuations adjust. “We see opportunities in quality small-cap and micro-cap stocks,” he said.
The recent decline in Indian equities has come amid heightened global uncertainty as the conflict involving Iran, the United States and Israel enters its ninth day, triggering volatility across financial markets and pushing crude oil prices sharply higher.
While geopolitical shocks often lead to short-term market declines, Shah said the broader global equity cycle remains intact and investors should focus on long-term trends rather than near-term turbulence.
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